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Stop Loving your bank

Banking services in India has come long way from being BAM (Brick And Mortar) in 80s of ledger based paper transactions to electronic arcades of Core banking, IVR, cards, ATM, Net banking, Cheque and Cash acceptance and processing, Call center, banking, Social media..P2P.. and more from 2000 to 2014 and going towards Digital Banks.

All those years, bank communicated to it's loyal customers to use those electronic channels for faster anywhere any time banking services. You see You Love It and we will Love your Money !!!

Note: I myself build a product to link Fixed Deposit (Flexi Deposit) to ATM card as Power Card for customers hungry for large daily withdrawal limits.

Customers uses these services and simply Love it !!!

Now, trouble starts as Trust relationship gets build and some where some brilliant business owners and smart consultants kills it in the name of better product, cost effective, innovative !!! (remove those luxury and love of customers in the name of eating bottom lines.),

ATM services in India has also gone through same cycle as, one dent in LOVE relationship recently, in the form of mandate from RBI (in concurrence with banks who started feeling pinch of ATM operations and its costs.)

Note: I myself had build several business cases and reports to steering committee of the banks and decision makers with ATM as Infrastructure for Bank rather than luxury. I could have found ways to equate this maths using different formula.

Let us, first look at What is the new Mandate of ATM usage in India?

1. Home Bank Branch ATM transactions in Metro locations are capped to Three Free Transactions and rest will be charged @ Rs 20/- (with taxes as applicable additional).

2. Banks need to Display board to explicit mention that, ATM location belongs to METRO and NON-METRO.

3. Banks need to display customer notice about free transactions and charges levied at such locations.

4. Customer still eligible for Five Free Transactions provided Other Two transactions are carried out at NON METRO locations.

As acustomer, it looks more or equally complicated than Toll structure in Singapore or in NICE, France which varies with location or traffic :)

Some of the challenges which lead to the above mandate:

1. Large Issuers felt pinch as they are NET PAYER of few millions as interchange fee to acquiring banks. Oops !!! so why did you become big issuer with out rationalise on your acquiring numbers? or write off against the additional investment that would have sinked in in its CAPEX and OPEX ?

2. Large acquirers felt pinch as cost of operations increasing !!! Cost of keeping the place clean, secured are overheads, cash management !!!

Those who went to RBI need to put a thought on why did they allowed to increase its size with out all such considerations while 'APPROVAL' of those deployments ? What solutions and ways to salvage?

3. Low or Medium acquirer and issuers don't face issue as their size allow them to control cost and operations due to size but, they would love to make money if Large acquirer and issuers make some quick bucks why to loose them .. Join band wagon :) Any one will do if in their place.

If any one scratch a surface and look deeper then would know that, there can be opportunities lying in these adversities.

1. Indian Customers will be promoted to try and use new channels such as mobile banking, mobile wallets and way to pay using cards and cheques rather than cash.

2. White label ATMs (IAD) deployment have started in India with more than 6 players actively planning deployment of more than 5000 ATMs(each WLA) in next 18 months. They can leverage such adversities.

3. Banks would like to see more customers (atleast 45+, 55+ age group) visiting branches rather than ATMs and withdraw more money for its monthly consumption @ home. Banks will 'Love' them for cross sale and up sale opportunities :)

So next time when you enter those bank lobbies with some smart floor manager walks in to you with customer feedback don't tick on option 'Love' (5)  among Like (4), Satisfied (3), Need Improvement (2) option as you rated 'Love(5)' for ATM services in Year 2000, now it has become partial paid service :)


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Hitesh Thakkar

Hitesh Thakkar

Technology Evangelist (Financial Technology)

SME - Fintech startups (APAC and Africa)

Member since

05 Feb 2008



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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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